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Central Asia-Caucasus Analyst

FIELD REPORTS: ENDGAME FOR THE CASPIAN STURGEON Christopher Pala U.S. URGES KYRGYZSTAN TO CONTINUE BILATERAL COOPERATION AGAINST TER-RORISM Erica Marat NURSULTAN NAZARBAYEV OFFERS UP HIS SON-IN-LAW TO JUSTICE, SEEKS PUBLIC FAVOR Farkhad Sharip REMITTANCES AND TAJIKISTAN’S PRIVATE SECTOR DEVELOPMENT Sergey Medea NEWS DIGEST

BI-WEEKLY BRIEFING VOL. 9 NO. 12 13 JUNE 2007 Searchable Archives with over 1,000 articles at http://www.cacianalyst.org

FEATURE ARTICLE

FOREIGN FIGHTERS AND THE CHECHEN

RESISTANCE: A RE-APPRAISAL Cerwyn Moore

ANALYTICAL ARTICLES

PUTIN’S GABALA GAMBIT: MORE THAN

MISSILES Stephen Blank

THE GABALA GAMBIT AND

AZERBAIJAN’S GEOPOLITICS Richard Weitz

BERDIMUKHAMMEDOV BASES

TURKMEN-KAZAKH RELATIONS ON ‘PRAGMATISM’

Chemen Durdiyeva

Central Asia-Caucasus Analyst

BI-WEEKLY BRIEFING VOL. 9 NO. 12 13 JUNE 2007

Contents Feature Article FOREIGN FIGHTERS AND THE CHECHEN RESISTANCE: A RE-APPRAISAL 3 Cerwyn Moore Analytical Articles PUTIN’S GABALA GAMBIT: MORE THAN MISSILES 7 Stephen Blank THE GABALA GAMBIT AND AZERBAIJAN’S GEOPOLITICS 10 Richard Weitz BERDIMUKHAMMEDOV BASES TURKMEN-KAZAKH RELATIONS ON ‘PRAGMATISM’ 13 Chemen Durdiyeva Field Reports ENDGAME FOR THE CASPIAN STURGEON 16 Christopher Pala U.S. URGES KYRGYZSTAN TO CONTINUE BILATERAL COOPERATION AGAINST TERRORISM 17 Erica Marat NURSULTAN NAZARBAYEV OFFERS UP HIS SON-IN-LAW TO JUSTICE, SEEKS PUBLIC FAVOR 19 Farkhad Sharip REMITTANCES AND TAJIKISTAN’S PRIVATE SECTOR DEVELOPMENT 20 Sergey Medea News Digest 22

THE CENTRAL ASIA-CAUCASUS ANALYST

Editor Svante E. Cornell

Assistant Editor, News Digest

Alima Bissenova

Chairman, Editorial Board S. Frederick Starr

The Central Asia-Caucasus Analyst is an English language global Web journal devoted to analysis of the current issues facing the Central Asia-Caucasus region. It serves to link the business, governmental, journalistic and scholarly communities and is the global voice of the Central Asia-Caucasus Institute & Silk Road Studies Program Joint Center. The Editor of the Analyst solicits most articles and field reports, however authors may suggest topics for future issues or submit articles and field reports for consideration. Such articles and field reports cannot have been previously published in any form, must be written in English, and must correspond precisely to the format and style of articles and field reports published in The Analyst (www.cacianalyst.org) and described below. The Analyst aims to provide our industrious and engaged audience with a singular and reliable assessment of events and trends in the region written in an analytical tone rather than a polemical one. Analyst articles reflect the fact that we have a diverse international audience. While this should not affect what author’s write about or their conclusions, this does affect the tone of articles. Analyst articles focus on a newsworthy topic, engage central issues of the latest breaking news from the region and are backed by solid evidence. Articles should normally be based on local language news sources. Each 1000-1200 word analytical article must offer a concise and authoritative statement of the event or issue in question. An article must provide relevant, precise and authoritative background information. It also must offer a sober and analytical judgment of the issue as well as a clinical evaluation of the importance of the event. Authors must cite facts of controversial nature to the Editor who may contact other experts to confirm claims. Since Analyst articles are based on solid evidence, rather than rumors or conjecture, they prove to be reliable sources of information on the region. By offering balanced and objective analysis while keeping clear of inflammatory rhetoric, The Analyst does more to inform our international readership on all sides of the issues. The Editor reserves the right to edit the article to conform to the editorial policy and specifications of The Analyst and to reject the article should it not be acceptable to our editorial committee for publication. On acceptance and publication of the edited version of the article, The Central Asia-Caucasus Institute of The Johns Hopkins University-The Nitze School of Advanced International Studies will issue an honorarium to the author. The copyright for the article or field report will reside with the Central Asia-Caucasus Analyst. However, the author may use all or part of the contracted article in any book or article in any media subsequently written by the author, provided that a copyright notice appears giving reference to the contracted article’s first publication by the "Central Asia-Caucasus Analyst, Central Asia-Caucasus Institute, The Johns Hopkins University-The Nitze School of Advanced International Studies." Submission Guidelines: Analytical Articles: Analytical articles require a three to four sentence Key Issue introduction to the article based on a news hook. Rather than a general, overarching analysis, the article must offer considered and careful judgment supported with concrete examples. The ideal length of analytical articles is between 1,000 and 1,300 words. The articles are structured as follows: KEY ISSUE: A short 100-word statement of your conclusions about the issue or news event on which the article focuses. BACKGROUND: 300-450 words of analysis about what has led up to the event or issue and why this issue is critical to the region. Include background information about the views and experiences of the local population. IMPLICATIONS: 300-450 words of analysis of the ramifications of this event or issue, including where applicable, implications for the local people’s future. CONCLUSIONS: 100-200 words that strongly state your conclusions about the impact of the event or issue. Field Reports: Field Reports focus on a particular news event and what local people think about the event, or about the work of an NGdO. Field Reports address the implications the event or activity analyzed has for peoples’ lives and their communities. Field Reports do not have the rigid structure of Analytical Articles, and are shorter in length, averaging ca. 700-800 words. Those interested in joining The Analyst’s pool of authors to contribute articles, field reports, or contacts of potential writers, please send your CV to: and suggest some topics on which you would like to write. Svante E. Cornell Research Director; Editor, Central Asia-Caucasus Analyst Central Asia-Caucasus Institute & Silk Road Studies Program Paul H. Nitze School of Advanced International Studies, The Johns Hopkins University 1619 Massachusetts Ave. N.W., Washington, D.C. 20036, USA. Tel. +1-202-663-5922; 1-202-663-7723; Fax. +1-202-663-7785

Central Asia-Caucasus Analyst, 13 June 2007 3

Feature Article

FOREIGN FIGHTERS AND THE CHECHEN RESISTANCE: A RE-APPRAISAL

Cerwyn Moore The death of Abu Hafs Al-Urdani, the Jordanian ‘Amir’ of the Arab fighters in Chechnya, points towards a series of further questions about foreign influence and radicalisation of elements of the Chechen separatist movement. The death of Abu Hafs seems to indicate the success that pro-Kremlin forces are having isolating and eliminating foreign fighters in so-called ‘special operations’. Indeed, Hafs was one in a succession of figures that pro-Kremlin forces have targeted and ‘liquidated’ over the last six years. Nevertheless, analysis of the Chechen resistance reveals a complex network of groups which continues to evolve, as it seeks to counter the emergence of a pro-Kremlin Chechen authority.

BACKGROUND: In April 2004, Abu Walid, the then leader of the Arab fighters in Chechnya, was killed in a ‘special operation’. Abu Walid, a Saudi national, had taken over as ‘Amir’ of the Arab fighters in Chechnya, following the death of Amir Khattab in 2002. From late 2001 a number of affiliates, be they foreign fighters, mercenaries or ideologues, including Bilal Al-Qaiseri, Mokhled al-Utaibi, Yusef Said Saudani and Abu Omar al-Saif, are said to have been arrested or killed by pro-Kremlin groups. By December 2005, the Kadyrovtsy (forces under the control of pro-Russian Chechen President Ramzan Kadyrov) had claimed responsibility for killing Abu Jafar al-Yemeni. Meanwhile, another foreign ideologue, Abu Omar al-Kuwaiti, otherwise known as Abu Zaid, had been cornered and killed earlier that year. According to Russian press releases, both Abu Jafar and Abu Zaid had played a role financing and orchestrating terror attacks across Russia, including the Beslan school siege.

Elements in the Chechen separatist movement have done much to use new operational environments. In particular, the use of co-ordinated mass hostage-taking in the first conflict (in Trabzon and in Chechnya itself, coinciding with the 1996 raid on the Dagestani town of Kizlyar) and in the Swisshotel Siege in Istanbul in the second conflict, points towards the role of the “Abkhaz battalion”, a group of fighters allegedly trained by the Russian military who served in Abkhazia in 1993. Allegedly, the battalion included a number of fighters from the Diaspora community, such as Turkish citizen Muhammed Tokcan, highlighting the capacity of elements in the separatist movement to forge links with sympathisers across the Caucasus. In the first conflict, press reports indicated that a small number of mercenaries and one or two Arab fighters were involved in events such as the raid on Kizlyar.

As their names indicate, foreign fighters and ideologues such as Hakim al-Medani, Abu Jafar al-

Central Asia-Caucasus Analyst, 13 June 2007

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Yemeni, Yaqub al-Ghamidi, Abu Bakr Aqeedah and Mohammed Hinnawi are a diverse set of foreign volunteers who traveled to the North Caucasus in the mid-1990s. It must be emphasized that these fighters had a small influence on the second conflict, and had little, if anything, to do with the first war. In this regard, as some specialists have noted, it is perhaps the Yemeni connection which requires further analysis. In contrast to work on Arab fighters, it is clear that a number of volunteers did arrive in the region from North African states, and became involved in the second conflict.

Abu Hafs Al-Urduni

Ruslan Khamzat Gelayev commanded a group of fighters which included a number of North Africans, a small number of whom may have been jihadis from Algeria. In recent years, a series of arrests and trials in France have focused on figures from the network of the international mujahideen who served in Chechnya. Yet, Gelayev was often said to be in conflict with other warlords who fought under the banner of Islam. For example, he supported former Chechen president Aslan Maskhadov in his confrontation with Islamists in 1998, and, following his retreat from Grozny, Gelayev’s men were surrounded in his native village of Komsomolskoye. According to reports, Gelayev’s unit may have been betrayed by Arbi Barayev. If true, Barayev, the head of al-Jihad-Fisi-Sabililah, popularly known as the Special Purpose Islamic Regiment, may well, at the least, have been in rivalry with Gelayev, highlighting a schism between Chechen warlords. After his uncle’s Arbi’s death, Movsar Barayev took

over as leader of al-Jihad-Fisi-Sabililah, until his death in the Moscow Theatre Siege of 2002. The brigade was then controlled by Khamzat Tazabayev, otherwise known as Abu Sabur, until he was killed in February 2004.

In effect, therefore, the notion of a coherent body of radicalized fighters within the Chechen resistance, under the command of Khattab, Basayev, or even Gelayev seems, at best, to be problematic. Instead, prior to the outbreak of the second war, it seems that Basayev hosted Khattab, and, over a period of time, a form of Salafi-Jihadism emerged that Basayev and others labeled as Khattabism, and which provided an umbrella for a diverse set of fighters and financiers to integrate into the indigenous resistance movement.

At present, however, the separatist movement appears to be evolving, focusing on developing a regional strategy to destabilize areas outside of Chechnya, to maintain a military capacity and coherence following the death of key field commanders, and to attack pro-Kremlin Chechen groups loyal to President Putin.

IMPLICATIONS: In late July 2006, barely two weeks after the death of Shamil Basayev, the Algerian Salafist Group for Call and Combat (GSPC), published a press release in praise of the role Basayev had played fighting Russian forces in Chechnya. The eulogy praised the role of Basayev as a jihadi fighter. The GSPC is a splinter group of the GIA, (Groupes Islamiques Armés or Armed Muslim Groups) that was involved in the Algerian civil war which erupted in 1991. While the links between North African groups –specifically the GSPC – and small elements of the Chechen resistance remain unsubstantiated, this press release does point toward an interesting association between fighters from North African states and Chechnya.

The implications of these events can be seen in at least three points. First, it appears that the death of each of the foreign fighters highlights the success of pro-Kremlin forces in targeting and eliminating specific figures, but also of curbing the movement of such figures, even within Chechnya proper. Abu Hafs was killed in Dagestan, Abu Zaid and Shamil Basayev in Ingushetia, though it is unclear whether Basayev’s death was accidental. In effect, therefore, elements in


the separatist movement have also attempted to strengthen links with regional groups through, amongst other strategies, the establishment of military jamaats. In the North Caucasus, jamaats were generally viewed as communal organizations, often based around tribal communities associated with local Muslim groups. More often than not, jammats were associated with politics and economics in villages, but, over time, they assumed a military role, often to facilitate mobilization and enable the defense of villages.

Second, it provides evidence not only of radicalization, as some commentators have mistakenly noted, but of a much more complicated picture, in which some elements of the Chechen separatist movement actively fostered links with Middle Eastern sponsors. The figures mentioned all played a peripheral role, militarily and even financially, in the first war. Nevertheless, the Algerian connection has, in recent years, been brought into focus. In a series of press releases, Russian authorities have pointed towards Kamel Rabat Bouralha, an Algerian, as a key aide of Basayev. Bouralha was arrested in Russia en route to Azerbaijan in September 2004. News reports also noted that a suspected mercenary, Yusuf Said Sudani, tried in Dagestan in 2002, and a suspected terrorist, Merouane Benhamed, arrested in France in late 2002, were both said to be of Algerian descent, while it was alleged by some commentators that Abu Walid had connections to the GIA.

Third, influential foreign figures involved in the second conflict have common backgrounds, which may have impacted upon internal radicalization, in parts of the Chechen separatist movement. While Khattab, Abu Walid and Abu Hafs had a common background in Tajikistan’s civil war in the early 1990s, other foreign fighters were linked via the North African channel and

the Diaspora communities in Kazakhstan and Turkey. The North African channel facilitated the movement of disenfranchised former Egyptian Islamic Jihad (EIJ) members such Mohammed Hinnawi, and others from North African states like Morocco, to Chechnya. The Arab channel led the likes of Sheik Fathi, Abu Omar al-Saif and Abu Zaid and Abu Jafar al-Yemeni to Chechnya. Thus, rather than the development of a radicalized group of Wahhabi fighters shaping the resistance, a much more complex interweaving of networks and individuals, some with financial backing, others with ethnic links, were involved in the second Chechen conflict. Of course, this is not to say that

particular individuals did not draw on Wahhabism. However, unpacking their role as individuals and as part of differing social networks highlights how some readings of transnational Wahhabism may be misplaced, precisely because the term has been appropriated by the Russian authorities and employed derogatively, to describe extremist versions of Islamic revivalism. Instead, these combatants may be viewed through the lens

of a larger Salafi-Jihadist movement, insofar as this term is used to highlight connections with Diaspora communities, alongside Islam’s universality and purity.

Similarly, it was acknowledged that the some figures involved in the Moroccan bombings in 2003, had fought in Chechnya in the late 1990s. Legal documents issued by the Spanish government in 2003 highlighted the role of Salaheddine Benyaich, a key financier and recruiter for jihadi groups, who has since been convicted and imprisoned as a result of his links to terrorist organizations. But the role of these figures, or others such as Menad Benchellali in France, were focused on

Muhannad


6

sending volunteers and organizing logistical support. These figures seem to have commanded small groups of foreign fighters and been linked to the Chechen separatist movement through Khattab. Thus, rather than an integral role, many foreign volunteers did not radicalize the whole of the Chechen separatist movement. Instead, they played a role on the periphery of the movement or were subservient to known Chechen field commanders. Nonetheless, it also appears that the role of North African volunteers has been largely underplayed.

CONCLUSIONS: Little is know about the current leader of the Arab fighters in Chechnya, known as Muhannad. Of Middle Eastern origin, he fought alongside Khattab in 2002. But his influence may be in

the establishment of new links between the Chechen resistance and Middle Eastern beneficiaries, with a small group of other foreign fighters such as Abu

Abdullah al-Turki, playing a more significant role shaping attacks. Nevertheless, the death of significant figures in the Chechen foreign fighter movement, presents Russian authorities with a problem; how to justify continued human rights abuses as part of the ‘war against terror’. Indeed if key figures, said to be emissaries of Al Qaeda, have now been eliminated, does the ongoing fighting stem from indigenous discontent, as opposed to radicalization stemming from

foreign influence?

AUTHOR’S BIO: Dr Cerwyn Moore is currently a lecturer in International Relations, in the Department of Political Science and International Studies, at the University of Birmingham.


PUTIN’S GABALA GAMBIT: MORE THAN MISSILES

Stephen Blank While Russian President Vladimir Putin sought to reduce spiraling East-West tensions by proposing that the U.S. and Russia jointly operate a radar at Gabala that Russia leases from Azerbaijan, his Foreign Minister, Sergei Lavrov, called for a halt to the plans for missile defenses in Europe and urged restudy of the entire proposal. Several commentators considered Putin’s proposal to be a good idea or even a masterstroke. But when considered in all its dimensions, the Gabala gambit has many more sides to it then appears at first glance and that need to be factored into any analysis of its viability or suitability.

BACKGROUND: Putin’s initiative in many ways vindicates Washington’s refusal beforehand to back down in the face of escalating Russian threats about retargeting Europe with Russian missiles. Russian spokesmen had prominently argued, as Lavrov still does, that there is no justification for missile defenses because Iran cannot and does not pose a threat. Therefore the only plausible real rationale for these defenses is to threaten the Russian deterrent and Russia with the threat of negating Russia’s retaliatory strike capability, or in the future developing a ramified attack infrastructure comprising both conventional and nuclear weapons. None of this rhetoric had, however, stopped Rusisa from complaining in private and more recently in public, as Deputy Premier Sergei Ivanov’s speeches show, that in fact Russia is threatened by the growth of Iran’s and China’s missile capabilities and wants to respond by leaving the Intermediate-Range Nuclear Forces (INF) treaty and building more missiles to deter them. Putin’s statement should put an end to that, because the acceptance of missile defense in Azerbaijan explicitly invokes a potential Iranian threat. It is not by accident that the Iranian Parliament reacted angrily to the Russian attempt to make a deal with Washington at Iran’s expense and over its head. Thus the statement shows that Putin is more willing than before to acknowledge the potential of an Iranian nuclear and missile threat,

particularly in the light of Tehran’s recent deals with North Korea.

Russian military and political leaders, including Putin, had also stated that the projected European system threatened Russia because it could provide complete coverage up to the Urals. Thus America could monitor and then even target any Russian nuclear or missile activity throughout that region, giving it a capability for a first-strike attack upon Russia. In Putin’s own words, the Gabala radar would give even more coverage of Europe and of Russia. Thus here too Putin knocked the props out from under his own inflated threat assessment and confirmed that the Russian military threat assessment upon which he relied is groundless. Since Putin had earlier virtually invited the General Staff and military experts to provide such an assessment, and indicated that it would guide his response to missile defenses, he thus revealed the inherent tension of unresolved civil-military issues in defense policymaking in Russia.

Putin’s call for locating interceptors in Turkey, Iraq, or at Sea, indicate again that he probably received misleading briefings from his advisors. The absurdity of locating interceptors in Iraq needs no comment. Moreover, basing them at sea leaves them vulnerable to Iranian anti-ship missiles, liberally supplied by Moscow, and would not provide insurance against debris from the ensuing


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interception falling over Russian territory since the trajectory of Iranian missiles to Europe and America would pass over or near Russia.

Several commentators have noted that there are enormous technical and operational difficulties with joint control of the radar. The existing Russian radar has different and lower capability than does the American one and melding the two together would be a considerably difficult affair. There is also reason to believe that a key Russian interest in this proposal is to get technological intelligence from the U.S. and exploit it for Moscow’s own purposes. Obviously, Russia cannot rely on missile defenses against the growing Iranian or Chinese threat and must rely upon deterrence by the threat of retaliation up to the point of leaving the INF treaty. Until and unless its technological capabilities improve, e.g. by acquiring missile defense secrets, it must remain in this posture which always implies a presupposition of multiple enemies and threats. Especially in view of the mutual mistrust of the militaries, which is particularly strong among Russia’s military leadership, it is unlikely that an easy or smooth cooperation between Russia and America, particularly as the Russian military not only regards America as enemy number one, but has made clear on innumerable occasions that it really does not want deep cooperation with the U.S. military.

IMPLICATIONS: This mistrust and the political divergence of the two states concerning Iran have serious operational implications for use of the Gabala radar. If the radar is to be effective against Iranian missiles, it will have to detect them and be on virtually from the moment of the missile’s launch given Gabala’s proximity to Iran. Then it will have to report instantaneously to the interceptors wherever they are located. Under a condition of dual command and control where Moscow deprecates the Iranian threat, it may not be possible to use the radars in this way and they may be blocked for a time from transmitting data to interceptors as Moscow might be in a position to withhold consent for such transmissions. The Czech and Polish system, on the other hand, lie

astride the polar route for all launches to both Europe and the United States and would have the time to react and give appropriate commands to the interceptors. As Secretary of State Rice observed, these sites for missile defense were not chosen out of the blue. Thus there are serious operational and command issues that must be worked out in advance.

But matters do not end here. Iran has long let it be known to Azerbaijan that if it hosted American bases, as the Pentagon had earlier wanted, “bad things” could happen to it. This led Baku to reiterate its unwillingness to host such a base. While it is a major link in the air bridge to Afghanistan and an Azerbaijani air base is being converted into a state of readiness for use by NATO in that campaign, Baku has always understood that indicating a willingness to host US bases would bring down upon it the wrath of both Moscow and Tehran, something it could not tolerate. Therefore it refused such offers. A joint U.S.-Russian base, on the other hand, obviously undermines that possible threat, so it is not surprising that Azerbaijani officials cautiously welcomed Putin’s initiative. This initiative actually reflects Baku’s growing independence and freedom of action as a major energy producer and exporter, a situation that leads others to court it and that creates more room for it to maneuver in its foreign and defense policies. While it may not directly imply a possibility of recovering sovereignty over Nagorno-Karabakh, it does indicate Azerbaijan’s ability to make itself valuable to both Moscow and Washington and reap the benefits of that capability.

CONCLUSIONS: Undoubtedly, bilateral discussions between Washington and Moscow should continue, but it is not desirable that Washington listen to Lavrov and stops working on its proposal, as it has been extensively briefed to Moscow since 2005 and has solid strategic and operational logic behind the idea of placing defense sites at these European locations. While Putin’s initiative reveals both the groundless nature of Moscow’s attacks and the dangers that accrue to it


from its failure to reform its defense structures; it also highlights some other key trends in the vicinity of Iran and Azerbaijan. First, Moscow continues its slow but so far steady drift away from Iran and is more willing than ever before to acknowledge the reality of the threat posed by Iran’s nuclear and missile programs. Second, it may be willing to cooperate with Washington in some form for the defense of the Caucasus against that threat, particularly insofar as Azerbaijan is at risk. This would be a particularly significant policy step and merits intensive exploration in these discussions, because it could reduce bilateral tensions to a considerable degree while strengthening possibilities for a joint approach to Iran. Third, the Putin gambit reflects Azerbaijan’s heightened importance and standing thanks to its energy capabilities and its adroit handling of its relationships with Moscow and Washington. It also is increasingly important to the EU by virtue of its energy capabilities which have recently been found to be larger than expected.

There is more to the Gabala gambit than is to be found merely in operational issues, important as they may be. It could provide a bridge for improving cooperation on several issues, and not just those pertaining to missile defense. This is why the bilateral discussions and the original proposal should move forward together. Bilateral cooperation with Moscow should not be rejected out of hand, but it should not entail surrender to the phantoms of Moscow’s imagination. Rather, that cooperation should act, wherever possible, against real challenges and real threats.

AUTHOR’S BIO: Professor Stephen Blank, Strategic Studies Institute, U.S. Army War College, Carlisle Barracks, PA 17013. The views expressed here do not represent those of the U.S. Army, Defense Department or the US Government.

New Silk Road Paper!

The State-Crime Nexus in Central Asia:

State Weakness, Organized Crime and Corruption in

Kyrgyzstan and Tajikistan

by Erica Marat

This paper analyzes the divergent forms that relationships between organized crime and the state have taken in the two worst hit Central Asian states in the past decade.

This 138-page paper is available from the offices of the Joint Center cited on the inside cover of this issue, or freely downloadable in PDF format from either www.cacianalyst.org

or www.silkroadstudies.org.


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AZERBAIJAN’S GEOPOLITICS AND PUTIN’S GABALA PROPOSAL

Richard Weitz Russian President Vladimir Putin at the G-8 summit effectively encouraged the United States and its NATO allies to relocate the core of their missile defense architecture from East-Central Europe to the Caucasus region, specifically Azerbaijan’s Gabala radio station. The realization of Putin’s proposal would bring Russia considerable strategic benefits in the region and elsewhere. It is less clear, however, that Azerbaijan and it neighbors would derive equal advantages from its implementation. In particular, Azerbaijan would risk its improving relations with Iran.

BACKGROUND: On June 7, Putin surprised his fellow heads of state at the G-8 summit by proposing that the United States use the Gabala radar station in the northwest of the country, as its main European-based radar for its national ballistic missile defense (BMD) system. In addition, Putin argued that the missile interceptors originally intended for Poland should now be placed in Iraq, Turkey, or on Aegis-equipped warships or even floating platforms in the Caspian Sea. The suggestion followed months of escalating disagreements over U.S. plans to deploy a BMD radar in the Czech Republic and 10 interceptor missiles in Poland.

The Gabala radar facility began operating in the 1980s. Its original purpose was to enable the Soviet military to detect ballistic and some cruise missiles launched from the Southern Hemisphere. These included launches from Asian and African countries as well as from U.S. strategic missile-launching submarines operating in the Indian Ocean. With a range of 6,000 kilometers, the radar can monitor India, Iran, Iraq, Pakistan, Turkey, and parts of China and Africa.

Following the USSR’s dissolution, the issue of continued Russian military use of the radar, whose territory now belonged to an independent and sovereign country of Azerbaijan, became contentious. Though the Russian armed forces continued to operate the facility, the Yeltsin administration pressed Azerbaijan to agree to a

long-term leasing arrangement that would regularize continued Russian military access to the complex. As leverage, Russian negotiators threatened to curtail cheap energy exports to Azerbaijan or restrict the activities of the approximately two million Azerbaijani nationals working in Russia. Many of them remit a substantial share of their earnings to family members in Azerbaijan, a process which helps sustain the Azerbaijani economy.

Despite these considerations, the protracted negotiations did not result in a deal until 2001. The lease signed the following year granted Russia access for a 10-year period at an annual payment of $7-14 million. About 900 Russian troops belonging to the Federal Space Forces work at the complex.

IMPLICATIONS: Azerbaijani officials have indicated their willingness to engage in bilateral or trilateral talks with their Russian and American counterparts over the possible joint use of the Gabala radar station. At a June 8 press briefing in Baku, Foreign Minister Elmar Mammadyarov said that Azerbaijan appreciated that jointly operating Gabala as an anti-ballistic missile radar station could bring “greater stability and predictability in the region.”

Russians officials claim that they discussed their proposal with the Azerbaijani government on several occasions well in advance of the announcement. At the G-8 summit, Putin said he had discussed the issue directly with Azerbaijani


President Ilham Aliyev. In Baku, Deputy Foreign Minister Araz Azimov stated the proposal had also been reviewed during a May 21-22 visit to Azerbaijan by Russian Foreign Minister Sergei Lavrov.

In contrast, before Putin’s G-8 statements, the American and Azerbaijani dialogue on the issue had, in Mammadyarov’s words, been “rudimentary.” In any case, at his June 8 Baku press conference, the Foreign Minister made a point of reminding his listeners that, “It is not possible to undertake any actions without us,” implying his lack of confidence that Moscow and Washington would in the end take into account Azerbaijan’s peculiar interests. His remarks also laid down a marker that his government would be just as insistent as their Czech and Polish counterparts in upholding their rights as a potential host nation for such a controversial program.

In an interview with the Russian state television channel Rossiya that Aliyev subsequently gave while attending an economic conference in St. Petersburg, the Azerbaijani president cautiously remarked that Putin’s proposal “will become a new element of our cooperation with both Russia and the United States.” He warned, however, against any Russian-American attempt to reach a deal without involving the host nation: “If this project has a future, then detailed consultations are needed both bilaterally and possibly also trilaterally, with the participation of Russia, the U.S. and Azerbaijan.”

Many Azerbaijanis hope to leverage the base to gain support in their dispute with Armenia over Nagorno-Karabakh. The chairman of the opposition Democratic Party declared that hosting a joint Russian-American military base “could lead to the coordination of Russian and U.S. positions on other Azerbaijan-related issues, for example the Nagorno-Karabakh settlement.” When asked about Putin’s proposal, Armenian Foreign Ministry spokesperson Vladimir Karapetian said that Russia and the United States need to “take into account the balance of power in the region before making such a decision.”

Putin said his proposal was unlikely to harm Russian-Iranian relations “because this radar has been operational for quite some time.” Putin did not say anything about relations between Iran and Azerbaijan, which have been troubled since Baku gained independence in 1991. The large ethnic Azerbaijani minority in Iran has been a point of contention, and during the Nagorno-Karabakh conflict, the Iranian government supported Armenia with economic and other assistance. Tensions also arose regarding the division of rights to the Caspian Sea, as in 2001, Tehran dispatched military ships and aircraft to threaten two Azerbaijani research vessels exploring oilfields in the southern Caspian.

These ethnic, territorial, and other tensions have become less visible in recent years. In 2004, the two countries’ defense ministers signed a bilateral non-aggression pact. Azerbaijani officials subsequently cited the pact as excluding their participation in any collective military operation against Iran. Although Azerbaijani officials have allowed U.S. warplanes to traverse their airspace for activities related to the global war on terrorism, they have insisted they would not allow foreign countries to use their territory for military operations against their neighbors.

An Azerbaijani decision to grant the U.S. armed forces indefinite access to a military facility whose declared purpose is to help counter an Iranian missile threat to Europe and the United States, which Iranian officials emphatically deny they are developing, could worsen Azerbaijani-Iranian ties dramatically. Iranian state radio commented that the Russian proposal could have “serious regional implications in the domain of security.” Kazem Jalali, a member of the Iranian parliament and rapporteur of the Majlis National Security and Foreign Policy Committee, complained that the Russian government should not treat Iran as a “tool” for resolving great power disputes.

If Iran retaliated by imposing economic sanctions against Azerbaijan, many residents of southern Azerbaijan would suffer from the loss of commerce. The Nakhichevan Autonomous Republic, a


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landlocked Azerbaijani exclave whose borders with Armenia remain sealed, is especially vulnerable since it derives all its electricity and gas from Iran. Azerbaijan is also vulnerable to more violent forms of retaliation from Tehran, including air strikes and terrorist acts, though Iran would presumably not run the risk of provoking a U.S., NATO, and possibly even Russian military response from an overt use of force.

CONCLUSIONS: Presidents Bush and Putin plan to discuss the matter in more detail during July 1-2 at the Bush family summer home in Kennebunkport, Maine. The U.S. and Azerbaijani governments will likely address the issue formally at the next session of their bilateral security consultations, scheduled to be held in Washington on July 9-10. The Azerbaijani officials will likely have an opportunity to hear the Iranian

government’s reaction when President Mahmoud Ahmadinejad visits Baku in late June.

Many Azerbaijani national security experts see the Putin proposal as a tremendous strategic opportunity for their country. They overlook the fact that, besides further complicating their relations with Armenia and Georgia, the multilateral arrangement proposed by Moscow would lock in a Russian military presence in Azerbaijan for a long time, since now the Americans could see Russian participation as essential for legitimizing their own use of the facility.

AUTHOR’S BIO: Richard Weitz is Senior Fellow and Director for Project Management at the Hudson Institute.

New Silk Road Paper!

The Wider Black Sea Region: An Emerging Hub in European

Security

by Svante Cornell, Anna Jonsson, Niklas Nilsson,and Per Häggström

This 120-page paper analyzes emerging role of the Wider Black Sea Region in European Security, and European interests there. It

provides concise analysis of major challenges in the region, and policy recommendations for

Europe’s future policies there.

This 120-page paper is available from the offices of the Joint Center cited on the inside cover of this issue, or freely downloadable in PDF format from either www.cacianalyst.org

or www.silkroadstudies.org.


BERDIMUKHAMMEDOV BASES TURKMEN-KAZAKH RELATIONS ON ‘PRAGMATISM’

Chemen Durdiyeva

On May 28-29, 2007, Turkmenistan’s President Kurbangeldy Berdimukhammedov paid a two-day official visit to Astana, Kazakhstan. Having met with his counterpart Nursultan Nazarbayev and the head of the Kazakh Senate, he signed a number of long-term agreements in the sphere of trade, economics, military, culture and education. Within this context, Berdimukhammedov’s visit to Kazakhstan is his fourth official visit as head of state in six weeks. Taking his full entourage on all state visits having started with Saudi Arabia, Russia, Kazakhstan, CIS summit at St Petersburg with forthcoming visits to Iran, Brussels and Turkey, Berdimukhammedov appears to steer clear of Niyazov’s isolationism to more pragmatic relations based on constructive engagement.

BACKGROUND: President Berdimukhammedov’s visit to Kazakhstan is partly a continuation of the trilateral summit held among the presidents of Russia, Kazakhstan and Turkmenistan in the port city of Turkmenbashi (formerly Krasnovodsk) on May 12, 2007. This summit at the shore of the Caspian Sea had focused mainly on expanding cooperation in the energy sector, particularly opening up a new gas pipeline to Russia through Kazakhstan and developing humanitarian issues such as cultural and educational exchange. Accordingly, intergovernmental commissions were set up to work out the details of the implementation of this new trans-Caspian gas pipeline project and construction of a new railway expected to connect Russia, Kazakhstan and Turkmenistan with possible routes to Persian Gulf states.

On May 26, one day prior to the president’s visit to Kazakhstan, the Ashgabat-Almaty flight by the national Turkmen Airline was re-opened, and will carry out two flights per week from now on. It is noteworthy that this air route was halted under former President Saparmurad Niyazov’s rule for unclear reasons, and re-opening it anew adds up a symbolic meaning to this visit. At the bilateral meeting in the capital city of Astana, Berdimukhammedov and Nazarbayev first of all signed a long-term agreement on developing cooperation in trade, economics, science and culture until 2020 – a first of a kind in terms of

intergovernmental contracts for Turkmenistan. Second, a joint declaration was issued as to the direct implementation of all previously signed bilateral agreements, including the agreements of May 1993 and February 1997 on developing friendship and cooperation between the two countries. Third, the delegations – particularly the National Security Committee of Kazakhstan and the respective Turkmen agency – agreed on cooperating in the work of border commissariats and operative search services, meteorology, media exchange as well as government standardization.

Meanwhile, Berdimukhammedov’s visit to Kazakhstan promises to be crucial for Kazakh minorities residing in Turkmenistan. Within the framework of an agreement on cooperation in the humanitarian sector, a deal was reached to open up a new Kazakh school in the port city of Turkmenbashi, where the main language of instruction will be Kazakh. Although learning three languages had been state policy under Niyazov’s rule, bilingual lessons had been largely scaled down at secondary and higher educational establishments. The only exception was the Turkmen-Turkish high schools nationwide, where instruction is mainly in Turkish and English. According to a report by the Institute for War and Peace Reporting, the number of Kazakhs remaining in Turkmenistan in 2005 was 30,000, down from 90,000 only several years earlier. According to official statistics, a mix of Uzbeks,


14

Kazakhs, Tajiks and other minorities today constitutes roughly seven percent of Turkmenistan’s total population. A couple of years ago. with Niyazov still in office, Kazakh schools were reportedly closed down in the city of Turkmenbashi. Speaking on the motives for establishing close ties, both presidents claimed at a press conference that ‘pragmatism’ drives them to closer cooperation in all spheres of interest.

IMPLICATIONS: Berdimukhammedov’s latest initiatives vis-à-vis expanding cooperation on a wider scale with Russia and Kazakhstan seem to

have entailed a number of positive ramifications for Turkmenistan. If what the sides called a ‘pragmatist’ approach based solely on national interests works out in the end, then it is going to be the first and foremost tangible step toward liberalizing the Turkmen economy. At a plenary Cabinet session after the trilateral summit in Turkmenbashi, Berdimukhammedov gave strong directives to the head of the state Committee on Sports and Tourism to develop tourism at the seashore of the Caspian Sea, particularly in Turkmenbashi city. Since Turkmenbashi is envisioned to be a Free Economic Zone, Berdimukhammedov ordered to arrange more simplified visa and customs regulations, preferential customs tariffs, and long-term land leasing for foreign investors and tourists coming to this free

trade area. Additionally, other socio-economic conditions such as proper communications systems and transportation connections will also be arranged to attract foreign investors. Currently, investors from Saudi Arabia and Kazakhstan have already showed an interest particularly in extracting hydrocarbon resources in the Caspian Sea areas of Turkmenistan.

If these recent steps to attract foreign investors get implemented on the ground, and if the legal basis for foreign firms is truly guaranteed, it will immensely contribute to the development of trade

and tourism in Turkmenistan, sectors that remained less fortunate prior to

Berdimukhammedov’s administration. This is

particularly noteworthy amidst the opening of new commercial ties with neighboring countries. A ferry service connection that aims to connect the city of Turkmenbashi with the Russian city of Astrakhan through Aqtau in Kazakhstan will open up new trade

routes for fledgling businesses in Turkmenistan. Yet the construction of the planned new railroad connecting Russia, Kazakhstan and Turkmenistan promises to expand trade routes not only to Europe via Russia, but to the Persian Gulf through Iran as well. The specific details of this grand project are to be discussed during Berdimukhammedov’s upcoming visit to Iran around 16th of June.

Increasing Turkmenistan’s cooperation with the international community as well as with regional blocs constitute another aspect of Berdimukhammedov’s ‘pragmatist’ approach in the country’s foreign relations. As the president stated at a press conference in Astana, Turkmenistan is going to restore its relations with the Commonwealth of Independent States (CIS). He


said that Turkmenistan would remain an Associated member of the CIS but “actively participate in all of its summits from now on.” But holding a status of permanent neutrality, it is unclear whether Turkmenistan will become a full member of the Commonwealth and participate in fields such as military defense. This time, at the unofficial meeting of CIS countries in St Petersburg on June 10, Berdimukhammedov personally met with the presidents of Uzbekistan, Azerbaijan and Georgia to discuss bilateral issues. As was reported on state TV, Turkmenistan is going to open air flights to Georgia, resume the work of the once closed down Turkmen embassy in Azerbaijan, and resume cooperation with neighboring Uzbekistan. In the meantime, during a meeting with the European Union’s special representative for Central Asia, Pierre Morel, Berdimukhammedov spoke on expanding EU-Turkmenistan cooperation by increasing its current 1.5 billion dollar trade turnover to a greater level. A “European House - News Center” will soon be opened in Ashgabat as well.

CONCLUSIONS: All in all, the tangible results of Berdimukhammedov’s visit to Kazakhstan remain to be seen, since the mega-projects designed trilaterally at the May 12 summit are just getting raised at the governmental level. However, Berdimukhammedov’s fourth meeting with Nazarbayev within a relatively short time and Putin’s hasty support for the implementation of these projects create optimistic prospects.

New steps, such as the construction of new railroad, transport, and communications connections and arrangements in support of foreign investment and tourism in the oil-rich areas of the Caspian Sea may in fact serve as a good start for the liberalization of the Turkmen economy. Yet what Berdimukhammedov called a ‘pragmatist’ approach in the country’s foreign relations and close cooperation with the international community appears to lift Turkmenistan’s status as an isolated country in landlocked Central Asia.

AUTHOR’S BIO: Chemen Durdiyeva is an Ashgabat-based freelance writer.

New issue of the

China and Eurasia Forum Quarterly

The May 2007 issue of the China and Eurasia Forum Quarterly, edited by

Dr. Niklas Swanström, is online.

The issue contains articles by Daniel Burghart, Michael Mihalka, Braekhus &

Overland, Olga Oliker, and Sebastien Peyrouse, among other.

The issue is freely available online through www.silkroadstudies.org or

www.cacianalyst.org


16

FIELD REPORTS

ENDGAME FOR THE CASPIAN STURGEON Christopher Pala

For black market caviar in Atyrau, Kazakhstan’s sturgeon capital a few miles from the Caspian Sea, you need go no further than the main Nasikhat market. There, a stout woman standing behind a stall groaning under piles of carp, pike and sturgeon from the nearby Ural River delivers the bad news: beluga caviar now costs $800 a kilo, up from $400 last year and $35 a decade ago. Less sought-after sevruga and osietra caviar cost $500 a kilo.

“If you want to take it out, let me know, I have a friend in Customs at the airport,” she adds helpfully, trying to make a sale. The rise in price in part reflects Atyrau’s rapid development as a booming oil town where more and more people are again able to afford caviar, even at these high prices. Furthermore, Kazakhstan is expected to become one of the world’s top five oil exporters within a decade, with a ratio of oil revenue to population similar to Saudi Arabia’s.

But the high price of caviar also highlights how deeply overfished the world’s last major population of sturgeon has become. The 250-million-year-old species, once plentiful on both U.S. coasts and in Western Europe (where it was even called the common sturgeon, now extinct), has been nearly wiped out in the Caspian Sea over the past 20 years, after a half-century of carefully calibrated fishing during the Soviet period.

The soaring profitability of poaching – a single beluga’s roe can yield a fisherman from $10,000 to $15,000 – and the realization in the fishing community that the sturgeon will soon be gone has led to what fishermen, law-enforcement officers and scientists describe as an unprecedented frenzy of poaching. Just this year, it has involved shootouts, disappearances at sea, law-enforcement agencies accusing each other of poaching and the indictment of the city’s main cannery managers on charges of poaching and worse. It also illustrates why Kazakhstan ranks in the bottom third of Transparency International’s Corruption Perception Index.

In January, the financial police arrested a manager of the cannery (the other three fled to Russia) and formally charged the team with what local papers had been reporting for years: fishing at sea “under cover of the scientific catch” a far greater number of sturgeon than was allowed and “forging fishermen’s signatures to show they were caught in the Ural River” and not the sea.

In Soviet times, only the Atyrau branch of the Caspian Fisheries Research Institute, a once-powerful institution whose scientists effectively set catch quotas, were allowed to catch some sturgeon at sea near the delta, where they assemble to wait for the right water temperature to make their voyage hundreds of kilometers upriver to their


spawning grounds. Otherwise, sturgeon fishing was done in rivers, and only on alternating days.

“Since the fall of 2004,” a Financial Police statement said, “Atyraubalyk management has used criminal schemes for tax evasion and money laundering and buying sturgeon illegally caught at sea.” As a result, 4.6 tons of caviar and 78 tons of sturgeon meat were impounded.

Atyraubalyk is not the only institution accused of poaching. The Kazakhstani successor agency to the old Soviet KGB spy service, the KNB, issued a statement this spring noting “the increase of illegal fishing in the Caspian Sea and the highly organized criminal nature of poaching.” It warned of such “irreparable consequences” as the extinction of the Caspian sturgeon.

The KNB also accused the Water Police – one of 10 agencies charged with fighting poaching – of “involvement in illegal fishing.”

“Organized provocation!” thundered the head of the water Police, Mereke Izmuratov, to Lev Guzikov, a local journalist who covers poaching in an independent local weekly, Ak Zhaik. “Those who stand behind this activity want to remove me so

they can organize large-scale poaching while the fish are still here,” the journalist quoted the official as saying.

A scientist who now works for an oil company reports seeing poachers’ nets at sea as far as 15 km from the Ural River’s mouth. “There is so much competition that they are going after the fish farther and farther away,” he said. “I’ve never seen that before.”

Poachers, unable to distinguish between females and males, slice open the bellies of both, a former poacher said and throw the meat away, keeping only the eggs if it’s a female. When this author took a trip at sea near the delta last year, the floating carcasses were almost as numerous as the tell-tale empty plastic bottles that showed the illegal nets’ location.

It’s been three years since the scientific institute, which has since been forced to relocate inside the Atyraubalyk compound, was able to make a count of wild fingerlings. That count indicated that fewer than 300 sturgeon pairs from all three species had succeeded in spawning. How many made it this year is anyone’s guess.

U.S. URGES KYRGYZSTAN TO CONTINUE BILATERAL COOPERATION AGAINST TERRORISM

Erica Marat

In the course of only one week, two U.S. high officials –Secretary of Defense Robert Gates and Assistant Secretary of State for Central and South Asia Richard Boucher – visited Bishkek to discuss the development of Kyrgyz-U.S. relations. Both U.S. officials insisted that the Kyrgyz government and parliament should regard the status of the U.S. military base at Manas airport as key to international fight against terrorism. Furthermore, Boucher suggested that Kyrgyzstan not raise the issue of the U.S. military base in the upcoming

Shanghai Cooperation Organization (SCO) summit in Bishkek.

Such increased attention to U.S.-Kyrgyz relations appears provoked by a rapidly growing antagonism among Kyrgyz citizens and state officials towards the U.S. military presence in the country. According to the Bishkek-based Institute for Public Policy, although Kyrgyz-U.S. relations were stable during 2001-2004, they significantly worsened after the SCO summit of August 2005, when Kyrgyzstan was urged to request deadlines for the U.S. military presence on its territory. A year later, Kyrgyzstan


18

expelled two U.S. diplomats over allegations of spying.

However, the December 2006 killing of Kyrgyz citizen Alexander Ivanov by a U.S. airman was the tipping point for the accumulation of public anger. Local mass media outlets, political figures, and NGO activists mobilized excessively aggressively against the United States, seeking every possible reason to expel the U.S. military base from the country.

Rumors such as a U.S. government alleged plan to attack Iran from the Manas airbase, and the possible storage of nuclear weapons there, found a fertile ground for further speculations. This in turn made it easier for pro-Russian political forces to demonstrate their disagreement with Kyrgyzstan’s long-standing cooperation with the United States.

One popular Kyrgyz newspaper contemplated the risk of an Iranian attack against Kyrgyzstan over its cooperation with the United States, while former prime minister Felix Kulov came up with the idea of joining Russia in a confederation. Both Kyrgyz president Kurmanbek Bakiyev and Parliament Speaker Marat Sultanov are openly hostile to the U.S. military base. Amid wide criticism of the U.S. presence in Kyrgyzstan, there is hardly any concerned voiced about political developments in Russia.

As the SCO summit approaches, tensions around the U.S. base are intensifying and hence Secretary Gates and Assistant Secretary Boucher paid visits to Bishkek at the right time. Yet the Kyrgyz government will continue to feel pressure from the SCO member states, especially Russia and China, to curb the U.S. presence on its territory. Indeed, Russian Foreign Minister Sergey Lavrov will visit Kyrgyzstan on July 10 to boost Russian-Kyrgyz political and economic relations.

Both China and Russia offered their financial help with organizing the SCO summit. The summit

represents a unique opportunity for both Eurasian leaders to compel the weak Kyrgyz government to move further under the SCO’s influence. Even if Kyrgyzstan avoids discussing its relations with the U.S., the issue will most likely be raised by other SCO member states.

Although Kyrgyzstan today is the only Central Asian state where civil society activists are able to speak freely and unfazed by government’s persecution, this freedom of speech is often skillfully manipulated by larger political powers. The fact that the majority of the Kyrgyz population is exposed to Russian-speaking mass media outlets allows the easy promotion of pro-Moscow views among them. Furthermore, in regard to the U.S. presence, Kyrgyz politicians often appeal to the citizens’ feelings of patriotism, thus mobilizing them against a perceived national enemy. With the December 2006 killing of a Kyrgyz citizen, any pro-U.S. views were considered unpatriotic. Finally, rumors about the U.S. military base were quickly picked up by local mass media outlets and not countered by any other sources.

Should another incident similar to Ivanov’s case occur in the coming months, anti-U.S. moods will resume with even stronger pitch. Similarly, political actors in Kyrgyzstan are likely to seek support primarily among the SCO members in the upcoming presidential election in 2010.

Meanwhile, a special movement against the U.S. military base was formed in Kyrgyzstan. It is currently seeking funding and political support to stage rallies in Bishkek. The movement mainly unites communist youth from Bishkek. Unfortunately, the movement could be used by political forces wishing to either further destabilize the Kyrgyz government or to provide incentives for impairing official relations with the U.S.


NURSULTAN NAZARBAYEV OFFERS UP HIS SON-IN-LAW TO JUSTICE, WINS PUBLIC FAVOR

Farkhad Sharip

The legal persecution of Rakhat Aliyev, the former Ambassador of Kazakhstan to Austria and husband of President Nazarbayev’s elder daughter Dariga Nazarbayeva, is among the most sensational events in post-independent Kazakhstan that have galvanized the public. The dirty linen of the Nazarbayev family, paradoxical as it may sound, turned out to be a powerful propaganda tool that boosted the democratic image of the ruling regime.

The stunning news that Rakhat Aliyev was on the list of wanted suspects came from Kazakhstan’s Interior Ministry on May 28. Formally he was charged with kidnapping employees of Nurbank, a bank purportedly controlled by Aliyev, in January this year. But in the course of investigations, more crimes relating to the illegal purchase of millions worth of assets and money laundering come to the surface.

The abduction of Abilmazhin Ghilimov, the former chairman of the board of Nurbank managers, and his deputy Zholdas TimrAliyev, took place in hitherto unclear circumstances on the night of January 18. They were allegedly kidnapped by Rakhat Aliyev, who used force and threats to make them sell the premises of the bank and their business assets for a low price. Since that time, despite repeated demands of the relatives of the victims, no proper investigation into the case has been conducted. But recently Interior Ministry launched a new probe into the mysterious case which led to a whole string of arrests of dozens of suspects from Rakhat Aliyev’s entourage. On January 31, a group of unidentified armed men raided Nurbank’s offices and kidnapped the two executives who disappeared without trace. Although four Almaty police officers found themselves in the dock on suspicion of organizing the raid, it is widely implied from pro-government media sources that it was masterminded by Aliyev. Baghdat Kozhakhmetov of the Interior Ministry’s press

service urged journalists to refrain from biased interpretation of the case, as it hampers the course of investigation.

The scandal around Nurbank and Rakhat Aliyev’s alleged involvement triggered a veritable media war, which culminated in the Prosecutor General suspending the publication of the Aliyev-owned Karavan weekly and taking the KTK television channel off the air. Formally, the Prosecutor General’s office substantiated the closure of Rakhat Aliyev’s media outlets as a legal punishment for alleged violation of the language law. On May 10, a gang of masked people broke into the offices of the KTK television station and abducted two employees. It was found out later that they were, along with other detained people, interrogated by the Almaty police department. The following day, Rakhat Aliyev’s father, academician and a renowned surgeon Mukhtar Aliyev, the chief editor of Karavan Aleksadr Shukhov and former National Security Committee chief Alnur Musayev in a press statement denounced the pressure on Rakhat Aliyev’s media as “agony of the system, bogged down in corruption and inebriated by unlimited permissiveness and impunity”.

In a last-ditch appeal to his “very numerous supporters” in Kazakhstan, Rakhat Aliyev said he advocated Kazakhstan’s presidency of the OSCE because he wanted to raise his country up to the democratic standards of European countries and to ensure transparency at the highest level of power. He said he faced persecution after having made known to President Nazarbayev his intention to run for the presidency in 2012. “Charges against me are fabricated and they are politically motivated,” he added. He added that Kazakhstan will not benefit in any way from elections turned into a “political farce” and backtracking on democracy.


20

Events developing around Nurbank and Rakhat Aliyev are very complicated for people in the Kazakh streets to grasp. Everything in courtrooms is shrouded in ambiguous phraseology, media reports are incomplete and, more often than not, misleading. Theoretically, the presidential son-in-law, who was among the few rich in relatively well-faring Kazakhstan and had a normal political career, albeit remote from presidential court, had no apparent reason to rebel against the President. Rakhat Aliyev runs a successful business in and outside his country, holding a 10 percent share in the French Sucden sugar company, and is a co-owner of Nurbank. He effectively controls, besides a powerful media holding which includes Karavan weekly, the KTK television channel and Kazakhstan Today news agency, as well as a ramified network of sugar businesses in Kazakhstan. However, dramatic developments sparked by his unbridled ambition to vie for the presidency are likely to put an end to his enviable career.

On June 7, Nursultan Nazarbayev, during a call-in television chat, stated that he made the difficult decision concerning Rakhat Aliyev to show the public and the outside world that nobody is above the law in Kazakhstan. The Interior Ministry announced that Austrian police launched a criminal case against Rakhat Aliyev on suspicion of illegal transactions and money laundering, and Kazakhstan seeks the extradition of the suspect. Nazarbayev showed a great deal of tolerance, hiding the numerous wrongdoings of the unmanageable son-in-law from the public eye. But the inner power struggle, greed and lawlessness went so far that it is no longer possible to sweep these ills under the carpet.

On June 12, Rakhat Aliyev was officially divorced, against his will, from Dariga Nazarbayeva, showing that his prospects for a return to happier days are indeed dim.

REMITTANCES AND TAJIKISTAN’S PRIVATE SECTOR DEVELOPMENT

Sergey Medea

In recent years, migration from Tajikistan to Russia and the ensuing remittances have vastly grown and become accordingly significant in their economic impact. Currently, Tajikistan has one of the highest revenues worldwide from remittances, in relative terms: 20 to 50 percent of GDP, or approximately US$400 million to a billion. By and large, exporting labor at low prices has kept the country going – in the short term, such staggering remittances have predominantly positive effects on the country. But in the long term, the prospects are rather bleak: permanent migration and the dependency on other countries; and a failure to undertake the substantial private sector reform that Tajikistan badly needs –

and thus unwitting forfeiting of foreign direct investment.

The size of the remittances determines their use, either for consumption or investment. According to a National Bank Survey, remittances of under US$1,000 per year are spent on consumption (primarily food, clothing, medical care), while remittances of US$1,000-5,000 finance durables (cars, furniture, home improvements). Large remittances, over US$5,000, are used for investing in large scale endeavors (house construction, purchasing apartments, businesses). For two reasons, most remittances are used for consumption: first, most migrants to Russia are employed in housing and industrial construction, in trade and


services, catering and agriculture; and second, migration is predominantly seasonal or last no longer than 14 months. Moreover, there is little incentive or means to accrue private savings, thus nearly all remittances are used for subsistence, leading to increasing dependence on the part of families. This sort of problem crops up especially in agriculture, where dependence on migration congeals productivity improvement.

Remittances in Tajikistan are substantially responsible for poverty reduction: for 2007, Tajikistan proudly claims it managed to reduce poverty by 60 percent, as announced by UN Assistant Secretary General Kori Udovićki during a June 4 meeting with President Emomali Rahmon. They also help alleviate the stress caused by the lack of domestic job opportunities, as well as fuel consumption and economic growth. This creates the unfortunate illusion of growth and sustainable affluence, which, to quote an IMF working paper, Alexei Kireyev’s The Macroeconomics of Remittances: The Case of Tajikistan, often amounts to broken families, humiliating employment conditions abroad, and harassment associated with carrying cash.

The country cannot rely on remittances to such a large extent – for one, because working abroad is not safe, and a lot of Tajik people are killed in Russia due to the rise of Russians’ xenophobia. Moreover, Russia has already established quotas on how many Tajiks can legally work in Russia: Putin’s provisions basically do not allow Tajik people to work in retail trade in outdoor markets and kiosks – where the majority of migrants work. And generally, economic dependence on Russia is a vulnerability Tajikistan can hardly afford. Another reason can be that most Tajiks who go to Russia work in markets, construction, or similar jobs, not in their actual profession, leading to inefficient use of human resource capital. Further, stricter rules have lately been introduced in Russia, to push more employers to register migrant workers and provide basic health insurance and standard salary. This, in turn, may lead to further limits in employing migrants. Such reasons of insecurity, in turn, make it quite clear

that Tajikistan should work hard to create more jobs at home.

There is thus an urgent need for real private sector development, that is to create favorable conditions for business – especially now that Tajikistan outlawed all huge family celebrations and, if one is optimistic about implementation of the law, people can be expected to have more money to invest. Nevertheless, there are currently approximately twenty-two different organizations that regulate and permit businesses in Tajikistan and, as a result, starting a business takes up to two months, as opposed to circa one week in most of the developed countries. If favorable investment conditions arise, this would lead not only to larger direct foreign investment, but also to more small enterprises operating locally. This promotion of external and internal capital inflows to the national economy can in the long run enhance the movement for creating new jobs and would, overall, help increase living standards – and what is more, it would be due to internal use of market forces rather than remittances.

Tajikistan has endorsed an open-door policy for foreign investment. It literally opened up the banking system to international competition – and foreign banks have started a number of branches in the country. Also recently, the Tajik government approved a number of projects on the privatization of five big enterprises, among which are Tajik Air and Tajik Telecom. Nevertheless, for these transformations to be successful, the initial steps have to be followed by certain legal, structural and institutional reforms, as well as adequate infrastructure development to serve the private sector.

Tajikistan’s GDP is undoubtedly growing, which indicates better economic performance and overall social stabilization; but a more attentive look at what the GDP comprises, remittances originating in migration constitute a large percentage. It is then important for the government to look at this money in the long-term, i.e. its direction: and thus seriously encourage private investment, for therein lies the country’s healthy stability.


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NEWS DIGEST

KYRGYZ LEFTISTS DEMONSTRATE AGAINST U.S. PRESENCE 2 June Approximately 50 representatives of leftist political parties in Kyrgyzstan held a demonstration in front of the U.S. Embassy in Bishkek on June 2 to protest the presence of the U.S. military base in the country, RFE/RL's Kyrgyz Service reported. Klara Ajibekova, the leader of one of Kyrgyzstan's two communist parties, told demonstrators that the rally was the beginning of a drive to oust the base from Kyrgyz territory. "Kyrgyzstan is becoming the hostage of the U.S. Let the U.S. play all its games on its own territory. Today's rally is the beginning of the Kyrgyz people's struggle against the deployment of the base in the country," Ajibekova said. Aleksandr Tiperov, head of a movement calling for the removal of the U.S. air base, said that he and his supporters plan to gather signatures for a referendum on the U.S. presence, akipress.org reported. Kyrgyz law requires at least 300,000 signatures to trigger a nationwide referendum. A number of committees in Kyrgyzstan's parliament have recommended a review of the U.S. military presence. (24.kg) KYRGYZ OPPOSITION LEADER PROPOSES CONFEDERATION WITH RUSSIA 2 June An opposition assembly held by the opposition movement For a Worthy Future for Kyrgyzstan in Bishkek on June 2 called for a referendum on a union with Russia, Interfax reported. Former Prime Minister Feliks Kulov, the leader of For a Worthy Future, told reporters, "A union with Russia will preserve the unity of Kyrgyzstan and its people, who have been split by the government's silly steps into the north and the south." Kulov said that if parliament does not take up the plan for a confederation with Russia, activists will work for a referendum to dissolve the legislature. "We give the country's leadership until autumn. By that time, the collection of signatures in support of a confederation

with Russia will be completed, and we will wait for the authorities' reaction," Kulov said. "And following the collection of 300,000 signatures, we will put three questions to a referendum, specifically the creation of a union with Russia; an early presidential election; and the parliament's dissolution and a new parliamentary election." (24.kg) TAJIK PRESIDENT CRITICIZES RUSSIA ON DEBTS 4 June Speaking at a donors' conference in Dushanbe on June 2, President Emomali Rahmon criticized Russia for its failure to write off Tajik debts, agencies reported. Rahmon said "Russia very often writes off debts of African countries, forgetting about its closest neighbors." He added, "Asian countries remain forgotten, and in particular Central Asian countries." Rahmon said that Tajikistan has raised the issue with Russia several times and received no response, but will pay off its remaining debt to Russia "next year," RFE/RL's Tajik Service reported. Tajikistan's debt to Russia stood at $35 million in January 2007. (RFE/RL) UN PEACEKEEPING MISSION TO END WORK IN TAJIKISTAN 4 June Kori Udovicki, a UN assistant secretary-general and assistant administrator of the UN Development Program (UNDP), says the UN will close the Tajikistan Office of Peace-Building on July 31. Speaking in Dushanbe on June 4 after meeting with Tajik President Emomali Rahmon, Udovicki said: "There is a risk that the situation could deteriorate in every country that has undergone a conflict similar to the one in Tajikistan. However, countries should not be dependent on assistance." She said "Tajikistan can ensure its own security by itself," adding that "the international community should provide assistance to the country in its future development." She noted that the UNDP plans to


allocate $30 million in 2008 for education and health-care programs in Tajikistan. (Interfax) KYRGYZ SPEAKER SAYS U.S. SOLDIERS SHOULD LOSE DIPLOMATIC IMMUNITY 4 June Marat Sultanov, the speaker of Kyrgyzstan's parliament, told journalists in Bishkek on June 4 that service personnel at the U.S. air base outside the Kyrgyz capital should be stripped of their diplomatic immunity. At the same time, Sultanov noted that the agreement between the United States and Kyrgyzstan on the U.S. base was signed by the two countries' governments, and the Kyrgyz parliament can only recommend a course of action, but cannot cancel the agreement. Several parliamentary committees have recommended reviewing the agreement on the base. A number of issues have marred Kyrgyz-U.S. relations over the base, including a shooting at the base in December 2006 that killed a Kyrgyz citizen. Sultanov urged talks, saying, "We should review this agreement from all sides, since it is a particular foreign policy issue, and we shouldn't let emotions hold sway." (akipress.org) KAZAKH PRESIDENT'S SON-IN-LAW DETAINED, RELEASED ON BAIL IN AUSTRIA 4 June Austrian authorities arrested Rakhat Aliev, the son-in-law of President Nursultan Nazarbaev, in Vienna on June 1 and released him on $1.3 million in bail on June 3. Aliev, who is wanted on kidnapping charges in Kazakhstan, must remain in Austria while that country weighs Kazakhstan's extradition request. Aliev told Austria's "Profil" that "Austria must not deliver me to a system under which my life and the lives of my family are endangered." The charges against Aliev stem from an alleged takeover attempt at Kazakh bank Nurbank, in which Aliev is a shareholder. Aliev has said that the charges against him are a politically motivated response to his desire to run for the presidency. Kazakhstan's parliament recently removed term limits for Nazarbaev, whose current term runs through 2012. (RFE/RL) VISITING CHECHEN HEAD AWARDS KAZAKH LEADER 4 June The Moscow-backed head of the Chechen Republic, Ramzan Kadyrov, on June 4 awarded Kazakh

President Nursultan Nazarbaev the order of Akhmat Kadyrov. During his visit to Astana, Kadyrov told reporters that he presented Nazarbaev with the order on behalf of the Chechen people for "the fraternal, friendly relations and support he showed us during the years of the deportation of the Chechen people, support we feel up through the present day." Many Chechens were forcibly relocated to Kazakhstan during World War II. Kadyrov also said that he held meetings with Kazakh businesspeople in Almaty, Karaganda, and Astana, promising that Kazakh investors will soon send representatives to Chechnya to explore investment opportunities. (Interfax-Kazakhstan) GEORGIAN DEFENSE MINISTER SAYS PEACEKEEPER'S COMPLAINT UNFOUNDED 4 June Zviad Dzidziguri, one of the leaders of the Democratic Front opposition parliament faction, told journalists on June 4 that the faction has received a written complaint from one of the 850 Georgian servicemen currently deployed as part of the international peacekeeping force in Iraq. The unnamed serviceman said the heat and other conditions are intolerable, and asked the parliament not to give the green light for the deployment of some 1,200 more servicemen to Iraq. Georgian Defense Minister Davit Kezerashvili, however, told journalists in Tbilisi later on June 4 that the information contained in the letter is untrue, and no Georgian serviceman could have written it. (Caucasus Press) ARMENIAN PRIME MINISTER HINTS AT 'LARGE-SCALE' GOVERNMENT CHANGES 5 June Serzh Sarkisian predicted on June 4 that the composition of the new government will be clear by June 7, the day when the parliament elected on May 12 is due to convene for its first session, RFE/RL's Armenian Service reported. Talks between Sarkisian's Republican Party of Armenia (HHK) and its junior coalition partner in the outgoing government, the Armenian Revolutionary Federation-Dashnaktsutiun (HHD), began three weeks ago, but as on June 4 it remained unclear whether and on what terms the HHD would join the new government, according to Hrant Markarian, one of the party's leading members. Sarkisian said there are likely to be "quite large-scale changes" in the composition of the government,


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which will include some persons who are not connected with either the HHK, the HHD, or the pro-government Bargavach Hayastan (Prosperous Armenia) party, which has the second-largest parliament faction. He also said that there will be "some things that perhaps have never before existed in Armenian political culture," but declined to elaborate. (RFE/RL) OSCE CHAIRMAN IN OFFICE VISITS AZERBAIJAN 5 June Spanish Foreign Minister Miguel Angel Moratinos met in Baku on June 4 with President Ilham Aliyev and Foreign Minister Elmar Mammadyarov, Azerbaijani media reported. Moratinos reiterated the concern recently expressed by the OSCE High Representative for Media Freedom, Miklos Haraszti, over continuing reprisals against journalists in Azerbaijan, noting that "an independent press is essential for democracy." He affirmed that the OSCE will do all in its power to ensure that the presidential election due in 2008 is free and democratic. Moratinos also expressed the hope that at their meeting in St. Petersburg on June 10, Aliyev and his Armenian counterpart Robert Kocharian will "take an important step" closer to the signing of a framework agreement on the basic principles for resolving the Karabakh conflict, according to a June 4 press release posted on the OSCE website (http://www.osce.org). (RFE/RL) KAZAKH PARLIAMENT ADOPTS REVISED RUSSIAN LEASE OF MILITARY AREAS 6 June The lower house of the Kazakh parliament voted on June 6 to revise the terms of a lease governing Russia's use of two military areas in the country, Khabar TV reported. According to the terms of the new lease, Russia will pay $25 million each year for use of the Saryshagan and Emba staging grounds. Russia previously provided Kazakhstan with an equivalent value in arms and military equipment in an agreement originally concluded in 1995. Deputies also stipulated that a part of the annual payment must be used for the financing of health care and development of the local areas around the two military areas. (RFE/RL) NATIONALISTS DEMAND EXPULSION OF CHECHENS FROM STAVROPOL 6 June

Some 1,000 people rallied in Stavropol late on June 5 to demand the expulsion of ethnic Chechens and the resignation of Stavropol Krai Governor Aleksandr Chernogorov. Some protesters clashed with riot police, who briefly detained up to 51 demonstrators and filed charges against one of them. The unauthorized protest took place despite the imposition of tough security measures. It was held in response to the June 3 fatal stabbing of two Russian students, which some residents believe was carried out by Chechens to avenge the death of a Chechen youth during a May 24 brawl. It is not clear who killed the three young men, and no charges have been filed in those cases. On June 6, Chernogorov met with representatives of the protesters, who demanded that the murders be solved and that citizens' safety be guaranteed. A statement from the governor's office noted that the "representatives suggested that the leaders of ethnic diasporas be actively involved in an explanatory campaign for the population, including in the media, to help establish peace and calm in the city." Anatoly Kucherena, who is a Public Chamber deputy and a lawyer, appealed to the authorities to provide full information regarding the killings. He reminded them of the September 2006 fighting in Kondopoga in Karelia, which, he said, demonstrated the importance of providing complete and objective information to the public. (regnum.ru) CHECHEN AUTHORITIES REJECT TORTURE ALLEGATIONS 6 June The press service of the pro-Moscow Chechen Republic leadership issued a statement on June 5 rejecting as without foundation an article published in the June 3 issue of the British weekly "Sunday Times" reporting that videos are circulating in Chechnya showing members of the security forces subordinate to republic head Kadyrov torturing people, including a man suspected of stealing oil. The statement said that such information originates with "illegal armed formations" that have a vested interest in destabilizing the political situation in Chechnya. It further affirmed that the Chechen leadership is committed to resolving problems with human rights, and quoted reports by the human rights organization Memorial and comments by Council of Europe Human Rights Commissioner Thomas Hammarberg to the effect that the human rights situation has improved thanks to the efforts of the republic's leadership. Hammarberg was quoted as telling Kadyrov during talks in February


that numerous detainees he spoke to in Grozny complained to him that they have been mistreated or tortured. (RFE/RL) U.S. DEFENSE SECRETARY MEETS WITH KYRGYZ LEADERS 6 June U.S. Defense Secretary Robert Gates met in Bishkek on June 5 with Kyrgyz President Kurmanbek Bakiev and Defense Minister Ismail Isakov for talks focusing on issues related to bilateral military cooperation, including the status of the U.S. base in Kyrgyzstan, RFE/RL's Kyrgyz Service and AKIpress reported. At a press conference after the meetings, Gates noted that the talks also addressed "opportunities for expanding the nonmilitary side" of the U.S.-Kyrgyz relationship. The U.S. military base, located at the Manas air base, houses roughly 1,200 U.S. military personnel and serves as the primary support base for operations in neighboring Afghanistan. The high-level visit is seen as a response to recent recommendations by several key Kyrgyz parliamentary committees calling on the Kyrgyz government to "review" the U.S. military presence in the country, and follows recent calls by the parliament speaker demanding that U.S. personnel be stripped of their diplomatic immunity. As the most obvious symbol of the Kyrgyz-U.S. military relationship, the Manas base has sparked resentment among the Kyrgyz public in response to a number of issues: a shooting at the base in December 2006 that killed a Kyrgyz citizen; a collision that damaged a Kyrgyz aircraft; and complaints alleging that operations at the air base are harming the local environment. (RFE/RL) AZERBAIJANI EX-MINISTER DENIES LINKS TO FORMER PARLIAMENT SPEAKER 6 June Former Economic Development Minister Farxad Aliyev testified on June 6 at his trial on corruption charges that he never had any contacts with exiled former parliament speaker Rasul Quliyev. At the time of Aliyev's arrest in October 2005, he was accused of plotting with Quliyev to stage a coup d'etat. Aliyev also said that he discharged his ministerial duties honestly, regularly reported to the president on malpractice by various local officials, and sought single-handedly to dismantle the economic system under which individual powerful officials exercised a monopoly over the import of such basic goods as tea. He claimed his whistle-

blowing activities incurred the wrath of unnamed "black forces" who sought to destroy him and informed President Ilham Aliyev (to whom he is not related) of his alleged ties with the opposition and his presidential aspirations. Farxad Aliyev subsequently refused to answer questions from the prosecution. (day.az) NEW ARMENIAN PARLIAMENT CONVENES, ELECTS SPEAKER 8 June The parliament elected on May 12 convened on June 7 in Yerevan for its first session in the presence of President Robert Kocharian and of Catholicos Karekin II, who pronounced his blessing on the assembled deputies, Noyan Tapan and RFE/RL's Armenian Service reported. The eight deputies representing the opposition Orinats Yerkir party headed by former parliament speaker Artur Baghdasarian and the seven representing the Zharangutiun (Heritage) party of U.S.-born former Foreign Minister Raffi Hovannisian boycotted the opening session to protest the Constitutional Court's failure to respond to formal requests by four separate opposition parties to probe allegations of vote rigging during the May 12 ballot. Tigran Torosian, a member of the Republican Party of Armenia (HHK) that has the largest parliament faction, was again elected parliament speaker, having held that post in the outgoing parliament after Baghdasarian resigned in May 2006. Vahan Hovannisian (no relation to Raffi) of the Armenian Revolutionary Federation-Dashnaktsutiun was similarly reelected a deputy parliament speaker; the second deputy speaker's post went to Ishkhan Zakarian of the pro-presidential Bargavach Hayastan (Prosperous Armenia, BH) party. Prosperous Armenia has the second-largest parliament faction (25 deputies) and on June 6 signed a formal memorandum with the HHK on creating a coalition government. (RFE/RL)

AZERBAIJANI FOREIGN MINISTER: AZERBAIJAN READY TO START CONSULTATIONS ON GABALA RLS 8 June Azerbaijan Foreign Minister Elmar Mammedyarov announced his country is ready for talks on Russia-US joint use of the Gabala Radar Station. He made the announcement to reporters in Baku today, a REGNUM correspondent reports. Mammedyarov


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noted that the issue had been touched upon during his talks with Russian Minister of Foreign Affairs Sergey Lavrov. According to the Azerbaijani foreign minister, he told Lavrov that Moscow cannot discuss usage of the radiolocation station together with the United States without taking into account official position of Baku. The minister confirmed that Moscow had addressed Baku asking to tackle the issue and Azerbaijan is ready to start consultations in a two- or three-party format. According Elmar Mammedyarov, the cooperation will cause problems in the Azerbaijani-Iranian relations. (regnum.ru)

SUSPECTED KILLER APPREHENDED IN STAVROPOL 8 June Police in Stavrop

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